As more organizations adopt dynamic working arrangements — whether that’s a hybrid or fully in-office or remote-only workforce — HR departments face the tricky balancing act of keeping everyone happy when it comes to providing effective rewards and recognition.
Remote, hybrid, and in-office employees often have very different demands when it comes to rewards, and most organizations haven’t yet worked out how to strike the right balance.
Personalization could be the answer HR teams are looking for. Here are four methods you can use to effectively personalize rewards in a way that satisfies everyone.
Why Dynamic Workplaces Need to Think Carefully About Effective Rewards
“While hybrid work continues to grow in popularity, and has numerous benefits for both employees and employers, it also creates challenges for total rewards leaders,” says Gartner’s Brent Cassell.
“To meet the needs of an increasingly hybrid workforce and to stay ahead of today’s competition for talent, leaders must ensure their total rewards strategies address employees’ current challenges and work preferences.”
The problem is that most rewards strategies aren’t fit for remote work — and organizations know it. More than half of employers surveyed by Willis Towers Watson said their current strategy didn’t work for a remote workforce.
Remote workers know it, too. Only a fraction of employees feel they are acknowledged for their contributions, and that number continues to fall as the number of remote workers increases, say Gartner’s Brian Kropp, Jessica Knight, and Jonah Shepp. “The rise of remote work has put distance between employees and managers and made it harder for managers to see and recognize the work their team members are doing.”
That distance is having a very real impact, causing disparities between in-office and remote employees. For instance, research from the U.K.’s Office for National Statistics finds that employees who work mostly from home were 38 percent less likely to get a bonus.
Why Is Personalization Essential?
Rewards are a significant factor for employees choosing new jobs and deciding whether to stay at their current jobs. A blanket approach to rewards simply isn’t as effective as one that’s personalized.
The fact is that employees prefer having options, says Joseph Romsey at SHRM. It doesn’t matter whether it’s health insurance, their work schedule, or their rewards. Personalized rewards do more than satisfy employees; they also increase employee motivation and engagement, he writes.
The problem is that different employees have different needs, says the team at PwC. For example, at the onset of the pandemic, parents with younger children had to make major changes to their professional lives because they had no childcare. “A single person right out of school, on the other hand, may be looking for opportunities to pay down student debt, a need that may be magnified by stagnant or reduced wages.”
Rewards are lagging behind other areas of HR when it comes to personalization, according to Deloitte’s Dimple Agarwal, Josh Bersin, Gaurav Lahiri, Jeffrey Schwartz, and Erica Volini. “As a result, companies that personalize rewards — or better yet, create an individual relationship around rewards with each worker — can seize a distinct advantage in the talent market.”
What does the perfect personalized rewards system look like to them? “Our view is that a system that offers a variety of rewards and a way to personalize them is the only structure with the required flexibility to meet the diverse needs and desires of today’s variegated workforce,” the Deloitte team writes. “Talent today wants a custom rewards experience that reflects how they live, work, and communicate — not a one-size-fits-all approach rooted in the past.”
When it comes to remote employees specifically, inclusivity is key.
Jeff Gelinas, president of recognition and engagement at Engage2Excel says “recognition programs shouldn’t be different, but inclusive of the remote worker and how they work and interact with peers and managers.
“When effectively designed and implemented, these programs help foster a high-performance culture and deliver a measurable ROI for employees across the organization, regardless of work location.”
4 Ways to Increase Rewards Personalization for In-Office, Hybrid, and Remote Workers
So, how do you personalize employee rewards in practice? Hybrid organizations should consider one or more of the following options.
Adopt a Total Reward Platform
A total reward platform is an effective way to make access to employee rewards more equitable and show both remote workers and in-office workers that their rewards are of the same value.
A total reward platform can guarantee equality of access to benefits and rewards, writes Andrew Woolnough, in an article for the U.K.-based Reward and Employee Benefits Association. But it also provides a way for employees to tailor their rewards depending on their role and working conditions.
“For those working more remotely, these could include utility discounts such as employer-sponsored broadband contracts and professional development programmes,” he explains. “For on-site workers, meanwhile, it’s crucial to maintain the availability of benefits such as cycle-to-work schemes and transport loans, even if take up falls overall.”
A total reward platform also provides a way for companies to collect much needed feedback about rewards in order to increase personalization, says Jonathan Best, account director at uFlexReward.
“By requesting granular feedback on each reward program from employees, measurable and actionable insight across sentiment, effectiveness and satisfaction can be understood by HR and executives,” he writes.
“This moves organisations towards the holy grail of understanding ROI in that reward investment. If significant percentages of employees are telling you they do not value a particular reward program, that’s a waste in spend.”
Take a Global View of Your Rewards Program
For many companies balancing the reward needs of in-office, hybrid, and remote workers, their workforce may be located across the globe. That means care has to be given to ensure rewards are both relevant and equitable, regardless of where employees are located.
“Every employee should feel their benefits package is personally relevant, but every employee should have access to the same company-sponsored benefits whenever possible,” says Pavania Naidu, a senior total reward analyst at Remote.
With that in mind, when creating compensation benchmarks companies should take into account the different rules companies have when it comes to things like pension and salary contributions.
At the same time, companies should think carefully about how to handle rewards like student loan repayments (in countries where these are applicable) as well as the learning and development opportunities available to employees depending on their location.
Digitize Your Rewards
As employees become increasingly remotely distributed, reward strategies will need to become digital, too, says the team at Black Hawk Network.
“Gone are the days when a Manager can walk up to a member of staff and thank them for their hard work with a hand shake. Businesses will have to introduce new practises to adapt to a more ‘contactless’ way of behaving – including how they recognise employees.”
In other words, digital rewards — ones that require no face-to-face contact — will become the norm.
Remote rewards are any benefit that employees receive digitally, explains Ryan Green, a senior marketing executive at Picked.ai. They are specifically designed to solve the reward problems created by hybrid work, and that means they are inherently flexible and ripe for personalization.
Match Benefits to Life Stages
Certain employee demographics are more likely to work from home, according to research by McKinsey.
For example, men were more likely to be offered remote working than women (61 percent vs. 52 percent). Young workers were also more likely to have remote working opportunities than older workers at every income level. At the same time, older employees are more likely to be offered remote work but not take it.
With that in mind, rewards personalization could also entail matching benefits to life stages. This would see rewards broadly personalized based on employee demographics but stop short of hyper-personalizing rewards to each individual employee.
This aligns with employees’ preferences, say PwC’s Andrew Curcio and Alastair Woods. “Two of the main drivers of preferences and value are the life stage of an individual and that individual’s career aspirations,” they write.
“Understanding these drivers for each employee should inform the new ways of rewarding people, with more focus on learning, mentoring, career development, and well-being than on financial reward.”
Personalization isn’t a silver bullet. It won’t make up for sub-par rewards plans or a general lack of recognition. But these strategies can help you provide effective rewards, striking a balance in your hybrid office and ensuring remote workers feel as recognized and valued as in-office employees.